No, Virginia, there's no billion-dollar budget gap

Last night I watched the Republican gubernatorial debate on Iowa Public Television. If you missed it, you can read the full transcript here. Some Iowa stations are rebroadcasting the debate this Sunday too.

One of the worst things about televised debates is the lack of follow-up by the journalists who moderate. Wednesday’s exchange provided a classic example of this problem.

In his opening statement, State Representative Rod Roberts claimed state spending is at record levels, and “next year’s budget gap is projected to be nearly a billion dollars.” A few minutes later, former Governor Terry Branstad mentioned in his opening statement that Iowa has a “projected budget deficit of nearly a billion dollars for the next year.”

The budget statement shows 2011 appropriations are projected to exceed the expenditure limitation by $1.070 billion. The expenditure limitation is estimated at $5.396 billion and appropriations are estimated to total $6.466 billion.

Since then, state legislators convened for the 2010 session and adopted a budget for fiscal year 2011. On this page you can download pdf files with detailed information about the budget. The “general fund balance sheet” indicates that total funds available (expected revenues in fiscal year 2011) is about $5.46 billion. The legislature is not allowed to appropriate more than 99 percent of that figure, which would leave about $5.37 billion in available funds. In fact, legislators appropriated about $5.28 billion in general fund spending for fiscal year 2011, leaving a cushion of just under $92 million in case revenues fall below expectations.

Total spending in the 2011 budget is somewhat higher at $5.875 billion, but that does not represent any budget deficit. Iowa is receiving about $328 million in federal fiscal aid through the American Recovery and Reinvestment Act (better known as the 2009 stimulus), and legislators are drawing about $267 million from our state’s reserve funds as well.

Three journalists were sitting there moderating the debate, but none of them asked Roberts and Branstad to explain why they are still talking about a billion dollar budget deficit when the Iowa Legislature has approved a balanced 2011 budget.

Yes, “very low debt burden” even after the I-JOBS infrastructure bonding initiative had been approved.

Now, Republicans are bound to disagree with Democrats about appropriate levels of spending and taxation. Republicans don’t like using “one-time federal money” to balance the state budget, even though supporting state budgets was one of the explicit goals of the stimulus bill. If state governments responded to the biggest revenue collapse in six decades with draconian budget cuts, the ripple effect would deepen the recession. It’s also worth noting that most of the stimulus funds Iowa will receive during the 2011 fiscal year are in Medicaid. Would Republicans rather have declined those funds?

Branstad and Roberts are entitled to opinions about the budget choices Governor Chet Culver and Democratic statehouse leaders made, but as the saying goes, they’re not entitled to their own facts. There is no “billion-dollar gap” projected for 2011, or any budget deficit projected for 2011. If revenues come in too far below projections to be covered by the $92 million cushion built into the 2011 budget, mid-year spending cuts will be made, as they were in 2010. I hope we’ll be able to avoid that outcome, but that’s the reality.

I understand why journalists might feel reluctant to challenge Republican candidates during debates and interviews. They don’t want to seem biased, and they don’t want to burn bridges with someone who might be the next governor. Maybe journalists barely notice the chatter about the “billion-dollar budget gap”; when you’ve heard something a hundred times it can fade into the background. But the more voters hear “billion-dollar deficit” without any critique or follow-up, the more likely they are to believe something with no basis in fact.

Branstad, Roberts and Bob Vander Plaats will hold two more debates and many more public appearances and interviews before the June 8 primary. Here’s hoping their false spin on state finances stops getting a free pass from the media.

I’ll share other observations about Wednesday’s debate in future posts. Any comments about the governor’s race are welcome in this thread.

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I had the pleasure of educating a younger man about Branstad

and his years in office with respect to education yesterday. This young man was telling me that when Branstad was Governor, Iowa was first in the nation in education and I pointed him to the facts, that the Governor who had had the record of having Iowa as first for education in the past, had not been Branstad, and after sharing some links, he went from a Branstad supporter to a Branstad opponent, at least as far as the primaries go.

I haven’t been watching the Republican primary much, but I did tell him I had lived through Branstad as Governor, and to please let’s not do this again. I did point out the two sets of books and some of the other “sins” of Mr. Branstad, and then just turned him loose.

If I can’t defend Culver for some of his inaction, I hope to be able to at least set some people straight about who Mr. Branstad is and was when he was in office before.

I feel for some of the Republicans, it is kind of a Reagan thing where they are making him better than he was with time, instead of looking back at what he really did.